In a lawsuit initiated by the US SEC in January 2024 against Terraform Labs and its co-founder Do Kwon, a US court allowed Terraform Labs to retain the law firm Dentons.
Dentons agreed to return $48 million to Terraform, although U.S. Bankruptcy Judge Brendan Shannon ruled that the legal fees were a "necessary and appropriate" use of Terraform's limited resources. The law firm also agreed to accept more oversight from the bankruptcy court in the future. (CoinDesk)
Previously, Terraform Labs filed a document with a Delaware court to challenge the SEC's objection to the company's payment of a retention fee to Dentons U.S. LLC. The SEC previously asked the court to deny Terraform Labs' request to hire Dentons as its legal counsel, citing the company's $166 million in fees to attorneys.
The SEC alleges that a portion of this "suspicious" amount was transferred to "an opaque slush fund" and that the transfer was intentionally made to avoid payment of possible judgments arising from its enforcement actions. In a filing Monday, Terraform Labs renewed its request for legal fees, which the company said are necessary to respond to the SEC's lawsuit and cooperate with the Department of Justice's ongoing investigation. Terraform Labs said the SEC’s objections were without merit and should be dismissed.
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